Bitcoin Bled White by US Inflation – Falling $1,000 in Minutes

Free-wheeling inflation? – This was the bad news for this Tuesday, September 13, 2022: after a very light better last monththe indices of theinflation in the USA stagnate and fall less than expected by speculators. An announcement that made much trouble to the stock market, and even more to that of Bitcoin (BTC) and cryptos.

Price inflation stuck above 8% in the USA

Between the United StatesI’European Union and the UKit is to believe that we are playing whoever will have the biggest inflation. Yesterday, all the players in the various financial markets were eagerly awaiting the publication of the consumer price index (or CPI).

If this indicator of price variations of goods and services was scrutinized to such an extent, it is because it will certainly influence the policy of Federal Reserve US (Fed). The US central bank is indeed more likely to continue the aggressive increase in its key rates if inflation is not under control.

And the results, although again very slightly positivehave strongly disappointed market expectations. Indeed, if inflation over a rolling year has gone from 8.5% in July at 8.3% in August, analysts were hoping for inflation that had already come down to 8.1%.

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Sharp fall in BTC and ETH prices after the announcement of US inflation

As we can see on the graph below, taken from Trading Economics, it is however the second decrease – admittedly, small – since US inflation experienced a record 9.1% last June.

Consumer price inflation in the USA, year on year (month by month) – Source: tradingeconomics.com

But it was not enough. The disappointment was strongly felt on the assets considered as ” at risk “namely the actions companies, but also crypto-assets.

The course of Bitcoin thus lost $1000 in less than 1 hour after the announcement, going from 22,500 to 21,500 dollars. Nearly 24 hours later, it settles around the $20,500. Same observation on the ethers ofEthereum (ETH). They went from just over $1,700 to just over $1,600 in the wake of the CPI’s announcement. And prices are struggling not to go below now.

Next step now: Federal Reserve response to this fall in inflation, which is deemed too low. If the latter increases its key rate again as violently as during its last meetings, markets may suffer. Meanwhile, for his part, Will Bitcoin prove to be a solution against inflation?

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